- Many people in the United States are subject to surprise medical bills, which are often very expensive.
- A surprise medical bill occurs when a person seeks care at an in-network hospital or healthcare facility but is treated by an out-of-network physician.
- The No Surprises Act, which is set to take effect in January 2022, will protect people from receiving these surprise medical bills.
New legislation is set to take effect in January 2022 that is meant to end so-called surprise medical bills for people receiving emergency care and other health services in the United States.
The No Surprises Act, which Congress passed and former President Donald Trump signed into law in December, received widespread bipartisan support.
Earlier this month, the Biden administration issued an interim final rule, the first step of finalizing the details of the law.
But what does this law mean? Will Americans really see an end to surprise medical bills?
Healthline spoke with two experts in healthcare policy and medical billing to suss out the details.
First, it’s important to define what a surprise medical bill is. There are many situations when a person can be surprised by a medical bill, but this legislation defines it in a specific context.
“Here, the term ‘surprise medical bill’ is used to refer to out-of-network balance bills that occur in which the patient was not expecting them or had no control over them,” said Christopher Garmon, PhD, assistant professor of health administration at the Henry W. Bloch School of Management at the University of Missouri–Kansas City.
An example of this is if a person breaks their leg and goes to the nearest emergency room that they know is in their health insurance plan’s network, but they end up being treated by an out-of-network doctor.
“So, you just assume all the providers there are also in your health plan’s network, and that’s not necessarily the case,” Garmon explained.
“And so you may encounter an emergency room physician or an anesthesiologist or pathologist that turns out is not in your health plan’s network, and then a few weeks after your visit, you get a large bill asking you to pay the difference between what your insurance company paid and the total bill charged,” he said.
Surprise medical bills have garnered much attention in the press in recent years. One of the most egregious cases was documented in The New York Times by Elisabeth Rosenthal in 2014.
In her article, Rosenthal writes of a man who underwent elective neck surgery. Before the procedure, he made sure the hospital, surgeon, and the anesthesiologist on call were in his health plan’s network.
But during the surgery, an assistant surgeon, who was out of the patient’s network, was called in to help. The patient received a bill for $117,000.00.
While the price tags on surprise medical bills vary widely and the exact number of people who receive them is not known, a 2016 study from Yale University published in the New England Journal of Medicine offers some insight.
The researchers looked at 2.2 million emergency room visits across the United States and found that of those, 1 in 5 people who went to hospitals within their health insurance plan’s network were treated by an out-of-network physician.
Many of these people received unexpected, exorbitant bills. The researchers calculated the average cost of a surprise medical bill to be $622.55. However, they reported these bills could soar well into the thousands.
Another study from the Kaiser Family Foundation estimates that 1 in 5 emergency claims and 1 in 6 in-network hospitalizations include at least one out-of-network bill.
As of now, there’s not much you can do to avoid surprise medical bills.
Garmon pointed to the New York Times report where the patient diligently checked that all his providers were in-network before surgery and still received a surprise out-of-network bill.
“It can happen to people who are very sophisticated and know how the game is played,” Garmon said.
The new legislation is meant to put an end to this practice.
“The No Surprises Act protects privately insured patients from getting unexpected out-of-network bills from providers, hospitals, or their health plans next year,” said Krutika Amin, PhD, associate director at the Kaiser Family Foundation for the Program on the ACA. “What this means is insured patients would have to pay no more than their in-network rate for emergency services and wouldn’t be liable for any extra balance bills.”
You can choose to see an out-of-network provider for nonemergency services, she said, but you would have to be told in advance what the cost would be and consent to it.
“Otherwise, the patient is protected from getting unexpected bills,” Amin said.
The law also sets up a system for insurers and providers to negotiate among themselves to resolve the balance of the bill. If a solution cannot be reached, an independent arbiter will be brought in to determine a fair reimbursement.
“The arbiter will pick one of the two proposals from the provider or the health plan to determine what is paid,” Garmon explained. “The law is set up as much as possible to try to get the provider and insurer to agree on a reasonable reimbursement before ever getting to the arbiter.”
“But importantly, it completely takes the patient out of the middle,” he said.
One health service the legislation does not cover is ground ambulances.
So, in a medical emergency, if someone calls 911 and the ambulance that arrives is out of their health insurance plan’s network, the patient can still be subject to a surprise medical bill.
“That is one big hole in the No Surprises Act that will need to be rectified in the future,” Garmon said.
Finally, the law calls for the setup of a complaint system for consumers who believe they were subject to an illegal surprise medical bill.
When asked how optimistic they were that the new legislation would eliminate surprise medical bills for patients, both Garmon and Amin responded positively.
“The law is pretty clear that from January 1, 2022, providers need to start notifying patients of any out-of-network charges,” Amin said.
“The law itself and the regulations that are being written to implement the law, as far as I’ve seen so far, seem to be set up really well to protect the patients so that they will not receive a balance bill, and if they do, they have rights and ways of protesting that balance bill,” Garmon said.
However, he noted that a big question is what effect this law will have on other aspects of the healthcare system, such as premiums and healthcare costs.
“How will it affect the prices that are negotiated between providers and healthcare plans? When you change what happens when there’s not a contract, that affects what happens when there is a contract,” he said.
“It’s possible that it could lead to lower in-network prices and lower premiums. Or it could lead to higher in-network prices and higher premiums,” Garmon said.
“The jury is still out on that, and that’s where a lot of the research will be conducted in the future to try to determine what effect this will have on healthcare costs throughout the healthcare system.”